A report by the Treasury into the performance of government investment funds warns there is a limit to how much the funds can invest in the New Zealand stock market.
The warning comes in an annual report by Treasury's Crown Ownership Monitoring Unit on the performance of 44 government agencies with full or partial commercial objectives.
The report saysthat while only 7.6% of funds held by Crown Financial Institutes are invested in New Zealand stocks, the total value of those have increased by 23% over past 30 months.
At same time, total market capitalisation of the NZX has increased just 1%.
The report says that investment is now at the upper limits for Crown Financial Institutes.
It says it does not expect their investments to increase significantly in the near future - at least not without a big expansion in the domestic market.